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October 22, 2014

Meeting the Unique Requirements of Supply Chain Management for A&D

By TMCnet Special Guest
Kevin Deal, Vice President for Aerospace and Defence for IFS North America

The raw definition of the term supply chain would be the business process that covers the acquisition of raw materials through production, storage, transport and eventual delivery to the end customer. The business reality is that the supply chain covers the flow of goods towards the business (inbound) and away from the business (outbound). But does this model apply to the Aerospace and Defense (A&D) industry?



A&D: the fundamental differences
The A&D supply chain needs to focus, uniquely, on support as well as supply – managing maintenance, repair and overhaul (MRO) operations as an integrated process. For A&D, maintenance and repair is a key part of the supply chain. Maintaining this state of readiness requires a vast number of boxes to remain continuously ticked – the asset has to remain fueled, prepped, in perfect working order and, crucially, in the right place at the right time.

The military landscape contains a further complexity especially in the more developed regions of the world where there is a growing trend to move the responsibility for managing parts of the supply chain out into industry through Performance Based Logistics (PBL) contracts. Originally pioneered in the USA, PBL is seeing rapid adoption as budget-strapped governments seek a greater return than they could have possibly achieved internally. Because PBL is implemented as a contract there are comprehensive Service Level Agreements (SLAs) applied and punitive penalties applied for failure

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Visibility across the entire process keeps military in control
Closely linked to this is the need for agility, to be able to respond when something unexpected happens – key for the military who cannot predict wars or military intervention requirements.

So visibility is crucial to almost all business planning processes – the ability to see goods and materials as they are planned through a supplier's production facility with an expected dispatch date removes wasted time and reduces inventory. And in military terms, increased visibility means that the optimal state of readiness can successfully be achieved.

Predicting requirements to meet strict SLAs
Alongside cost control, 'spare utilization' such as health and usage monitoring systems (HUMS) provides an ‘early warning’ system that can alert a maintenance team when it is going to need to replace a component and therefore, forms an important addition to managing the supply chain for the military, enabling it to stay agile.

And in the A&D market, Service Level Agreements (SLAs) have driven the need to measure the performance of the supply chain, in real time, to be able to apply corrective actions on a sooner-rather-than-later basis.

No strategy leakage
Ideally, these solutions can be stand-alone or quickly and easily plugged into an existing ERP system. New approaches to enterprise planning now provide pre-configured and template solutions that are built around a Service-Oriented Architecture (SOA) that enables the military to 'pick and mix' solutions as and when required to develop, application by application, their own customized ERP solution.

This avoids "strategy leakage" across the organization by linking corporate strategy to supply chain business execution across all management roles. The military and its suppliers have a huge responsibility to provide a supply chain management solution that can integrate all this information, and the SOA approach means that a supply chain solution doesn’t have to be part of a single complicated, expensive solution – so often the traditional approach from ERP suppliers.

No-Risk approach best for the military
A Service-Oriented Architecture can enable defense organizations to add, change or modify their solution with elements such as demand forecasting or corporate performance management as their business requirements change.

About the Author: Kevin is responsible for all aspects of IFS in Aerospace and Defense within North America, and has been in the A&D IT business for over 25 years. Prior to joining IFS, Kevin held a number of roles as Director of Mid-Americas and Federal at BroadVision, as well as Director of National Sales at Cincom. Kevin was also a logistics war modeler and former Director of the DoD’s Supportability Investment Decision Analysis Center (SIDAC).




Edited by Maurice Nagle
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